Table Of ContentDIRECTORATE-GENERAL FOR INTERNAL POLICIES
POLICY DEPARTMENT A: ECONOMIC AND SCIENTIFIC POLICY
Collective Redress
in Antitrust
STUDY
Abstract
Consumers regularly suffer harm in the form of higher prices, lower output,
reduced quality and limited innovation as a result of antitrust infringements but
they are rarely compensated due to legal and practical obstacles. Collective
redress is a mechanism that may accomplish the termination or prevention of
unlawful business practices which affect a multitude of claimants or the
compensation for the harm caused by such illegal practices. This study analyses
the systems of collective redress for breach of competition law in the area of
antitrust in the EU. Starting with an overview of the relevant national and EU
legislation in this area, it discusses the question of an EU-wide specific system
for collective redress in antitrust and the legal basis for a legislative initiative at
EU level. Finally, it assesses advantages and limits of different policy options in
relation to several procedural rules both generally applying to collective actions
and specifically relevant to collective redress in antitrust.
IP/A/ECON/ST/2011-19 JUNE 2012
PE 475.120 EN
This document was requested by the European Parliament's Committee on Economic and
Monetary Affairs.
AUTHORS
Paolo BUCCIROSSI, Lear
Michele CARPAGNANO, University of Trento
Lorenzo CIARI, Lear
Massimo TOGNONI, Lear
Cristiana VITALE, Lear
With contributions by: Luca AGUZZONI, Marco BELLIA, Gaia BELLOMO and
Riccardo ZECCHINELLI
RESPONSIBLE ADMINISTRATORS
Doris KOLASSA
Stephanie HONNEFELDER, Seconded National Expert
Policy Department A - Economic and Scientific Policy/ECON
European Parliament
B-1047 Brussels
E-mail: [email protected]
LINGUISTIC VERSIONS
Original: EN
ABOUT THE EDITOR
To contact the Policy Department or to subscribe to its newsletter please write to:
[email protected]
Manuscript completed in June 2012.
Brussels, © European Union, 2012.
This document is available on the Internet at:
http://www.europarl.europa.eu/studies
DISCLAIMER
The opinions expressed in this document are the sole responsibility of the author and do
not necessarily represent the official position of the European Parliament.
Reproduction and translation for non-commercial purposes are authorised, provided the
source is acknowledged and the publisher is given prior notice and sent a copy.
Collective Redress in Antitrust
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CONTENTS
LIST OF ABBREVIATIONS 6
GLOSSARY 7
LIST OF TABLES 10
LIST OF FIGURES 10
EXECUTIVE SUMMARY 11
INTRODUCTION 15
1. STATE OF PLAY 18
1.1. Collective redress schemes in the EU 19
1.1.1. Identification of claimants 20
1.1.2. Legal standing: who is allowed to sue? 21
1.1.3. Binding or non-binding antitrust infringement decision 24
1.1.4. Limitation period for introduction of claims 26
1.1.5. Gathering evidence and disclosure of information 29
1.1.6. Allocation of cost 31
1.1.7. Sources for funding legal expenses 32
1.1.8. Provisions to facilitate settlement 33
1.2. Overview of case law 36
1.3. Conclusions 37
2. EVALUATION OF NATIONAL SYSTEMS 38
2.1. Evaluation of national systems 38
2.1.1. Effectiveness evaluation 39
2.1.2. Efficiency evaluation 41
2.2. Added value of an EU-wide system of collective redress in antitrust 42
2.2.1. Potential benefits of an EU-wide system 42
2.2.2. Potential costs of an EU-wide system 44
2.3. Conclusions 45
3. LEGAL ISSUES RELATED TO AN EU-WIDE SYSTEM OF COLLECTIVE
REDRESS IN ANTITRUST 46
3.1. General law principles for an EU initiative in civil substantive and
procedural rules 46
3.1.1. The principle of subsidiarity 46
3.1.2. The principle of proportionality 47
3.1.3. Competence of the EU to legislate on collective redress
- principle of conferred powers 47
3.1.4. General principles on civil and procedural law 48
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3.2. Specific legal issues related to the parallel competence to apply EU
competition law by the European Commission and by National
Competition Authorities 49
3.3. Specific legal issues related to the cross-border dimension of an EU
initiative 50
3.3.1. Information issues: opening of procedure(s) 50
3.3.2. Information issues: network to connect and organise potential
claimants 50
3.3.3. Jurisdiction conflicts and duplication of judgements 51
3.3.4. Forum shopping - location of court action 52
3.3.5. Applicable law 52
3.3.6. Execution of court decisions 53
3.4. Legal instrument: horizontal or antitrust-sector specific EU
initiative? 54
3.4.1. Horizontal initiative 54
3.4.2. Sector-specific initiative in antitrust 54
3.5. Legal basis for a coordinated European approach to collective
redress in antitrust 55
3.5.1. Judicial cooperation in civil matters (Article 81 TFEU) 55
3.5.2. Approximation of laws (Article 114 TFEU in conjunction with
Article 169 TFEU) 57
3.5.3. Competition law area (Article 103 TFEU) 59
3.5.4. Dual basis: Articles 103 and 114 (in conjunction with
Article 169) TFEU 60
3.6. Conclusions 63
4. INCENTIVES AND SAFEGUARDS 64
4.1. Identification of claimants (opt-in/opt-out) 65
4.2. Commonality of interest among the claimants 67
4.3. Standing: who should be allowed to bring a collective action? 68
4.3.1. Competence and loyalty of consumers’ associations 68
4.3.2. The ability of collecting funds 68
4.3.3. Small and medium-sized enterprises 69
4.4. Funding of legal costs: what kind of funding should be allowed? 70
4.4.1. Contingency and Conditional fees 70
4.4.2. Insurance products 71
4.4.3. Legal aid 71
4.4.4. Contingency legal aid funds (CLAFs) 72
4.4.5. Private funds 72
4.5. Recovery of legal costs 72
4.6. Gathering evidence and disclosure of information 73
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4.7. How damages should be determined 75
4.7.1. Punitive damages 75
4.7.2. Passing-on arguments 76
4.8. Incentives to settle 76
4.9. Conclusions 78
5. INTERACTION BETWEEN PUBLIC AND PRIVATE ENFORCEMENT IN
ANTITRUST 80
5.1. Binding or non-binding effect of public decisions? 80
5.2. Interaction with procedures specific to antitrust infringements 82
5.2.1. Interaction with leniency programmes 82
5.2.2. Interaction with cartel settlement procedures 83
5.2.3. Interaction with commitment decisions 84
5.3. Access to information held by the Commission and NCAs 84
5.3.1. Access to the file in general 84
5.3.2. Access to leniency applications 85
5.4. Limitation periods 86
5.5. Role of national competition authorities and the European
Commission as amicus curiae and of the ECJ in preliminary rulings 86
5.6. Conclusions 87
6. RECOMMENDATIONS 88
6.1. Legal issues 88
6.1.1. Legal instrument: horizontal or antitrust-specific 88
6.1.2. Legal basis: Article 103 TFEU 88
6.1.3. Legislative Act: directive or regulation 88
6.2. Incentives and safeguards 89
6.3. Interaction between public and private enforcement in antitrust 90
REFERENCES 91
ANNEX 1: Details on the analysis on the legal admissibility of an
EU-wide system for collective redress 94
ANNEX 2: Notification of the decision opening the procedure 97
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LIST OF ABBREVIATIONS
ACPERA U.S. Antitrust Criminal Penalty Enforcement and Reform Act
ADR Alternative Dispute Resolution
AGCM Autorità Garante della Concorrenza e del Mercato
(Italian Competition Authority)
ATE After-the-event insurance
CAT Competition Appeal Tribunal (UK)
CJA Collective Judicial Action
CPC Consumer Protection Cooperation
GCEU General Court of the European Union
CLAF Contingency Legal Aid Fund
ECHR European Convention for Human Rights
ECJ European Court of Justice
ECN European Network of Competition Authorities
ECON Committee on Economic and Monetary Affairs of the European
Parliament
EP European Parliament
EU European Union
FTC Federal Trade Commission (one of two US Competition Authorities)
NCA National Competition Authority
OECD Organisation for Economic Co-operation and Development
OFT Office of Fair Trading (UK Competition Authority)
SMEs Small and Medium-Sized Enterprises
TEC Treaty Establishing the European Community
TEU Treaty on European Union
TFEU Treaty on the Functioning of the European Union
US United States of America
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GLOSSARY
Alternative Dispute ADR is a term used for a wide variety of mechanisms aimed at
Resolution (ADR) resolving conflicts without the (direct) intervention of a court. ADR
schemes usually use a third party such as an arbitrator, mediator
or an ombudsman to help the two parties, e.g. consumer and the
trader, to reach a solution to their dispute.
Antitrust Antitrust in the EU context refers only to the specific part of
competition law deriving from Articles 101 and 102 TFEU, i.e.
anticompetitive agreements and abuse of dominant position and
excludes merger control, state aid, etc., which are however an
integral part of competition law. In the US, the terms antitrust and
competition law are often used synonymously.
Blackmail settlement Blackmail settlement refers to the risk that a defendant in a
(and discovery) collective action prefers to settle, even if the merits of the claim
are dubious, to avoid the expenses and the negative publicity that
will stem from the trial. A settlement may also be induced by the
prospective cost of complying with a disproportionate request for
disclosing documents and information in those jurisdictions (like
the US) where the discovery phase occurs before the trial and the
court has none or limited supervisory power.
Collective redress Collective redress refers to any mechanism that 'may accomplish
(or collective judicial the termination or prevention of unlawful business practices which
action) affect a multitude of claimants (consumers and/or SMEs) or the
compensation for the harm caused by such illegal practices' (see
Commission Staff Working Document, Public Consultation:
Towards a Coherent European Approach to Collective Redress).
Conditional fees Conditional fees refer to arrangements between lawyer and client
whereby the client pays a premium to the lawyer, above the
agreed fixed or hourly fees, in case of success.
Contingency fees Contingency fees refer to arrangements between lawyer and client
whereby the latter pays the former only if the case is successful,
usually with a share of the sum received.
Disclosure In a civil action each party can obtain evidence from the opposing
party by requesting the disclosure of relevant information as and if
foreseen in national legislation. Disclosure also includes any
specific document that the judges may order to produce.
Pre-trial discovery Pre-trial discovery refers to the compulsory (pre-trial) disclosure
of all documents relevant to a case; it is common in the US.
Forum shopping Forum shopping refers to the practice of some litigants of bringing
their action to the court that is considered the most convenient
one, i.e. where they will be most likely to obtain a favourable
judgement.
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Group/class action An action brought by one (or more) members of the group of
victims; the US term is class action.
Leniency Depending on the legal framework, competition authorities may be
programmes allowed to offer reduced penalties or even immunity to the first
company (whistleblower) disclosing information about a cartel in
which they are involved.
Limitation period The period of time during which a claim can be made. Normally
this period is calculated with respect to the moment in which the
cause of the harm is deemed to have arisen, or when a claimant
had reason to know of the harm.
Micro businesses Micro businesses are defined as companies having less than 10
employees and either a turnover of less than EUR 2 million or a
balance sheet total of less than EUR 2 million (according to the
Commission Recommendation of 6 May 2003 concerning the
definition of micro, small and medium-sized enterprises
2003/361/EC; OJ L 124 of 20.5.2003, p. 36).
Opt-in model Victims only become parties to a collective action if they take
some affirmative step to be included. Hence only those who 'opt
in' are bound by the judgment (and eventually receive
compensation).
Opt-out model All the victims become parties to the litigation automatically,
unless they take an affirmative step to 'opt out' of the action.
Hence, unless a victim opts out of the litigation, he or she will be
bound by any judgment issued by the court, or by any settlement
between the representative claimants and the defendant.
Passing-on The term ‘passing-on’ refers to the mechanism by which a
downstream supplier increases its selling price following a price
increase in one of its inputs.
Passing-on defence The passing-on defence can be invoked by defendants against the
direct purchasers when they claim for compensation for a cartel
price overcharge. According to the passing-on defence, the direct
purchaser is not entitled to receive compensation for the part of
the overcharge that he or she has passed on to the next layer of
indirect purchasers.
Passing-on offence A passing-on offence argument can be raised in two
circumstances. First, the indirect purchaser may claim damages
even if the relevant product was not purchased from the infringer
but from an intermediary, to the extent that the latter passed on
the overcharge to him. Second, the direct purchaser may claim
damages for lost sales due to the increase in price charged in the
downstream market due to the input overcharge caused by the
infringement.
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Description:Added value of an EU-wide system of collective redress in antitrust. 42. 2.2.1 TFEU Treaty on the Functioning of the European Union. US United
